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Tag Archives: KFC
Yum’s new leadership change marks the start of a new period of sustained same-store sales growth for KFC in China, overview by former Reuters journalist Doug Young
Bottom line: CIC’s withdrawal from the bidding for a stake in Yum’s China unit represents a minor setback, but Yum’s long history in the market makes finding major local investor less important.
CIC ends bid for Yum China stake
KFC parent Yum Brands (NYSE: YUM) has lost a major potential ally as it prepares to spin off its China business, with word that China’s sovereign wealth fund has dropped out of the bidding for 20 percent of the unit. Reuters is reporting that China Investment Corp (CIC) abandoned its bid for a number of reasons, including Yum’s refusal to sell a controlling stake to the new investor group. Yum has previously said it wants to sell just 20 percent of the China unit, which includes 7,200 stores. It also plans to sell more of the unit’s shares through an IPO later this year in Hong Kong or New York. Read Full Post…
Bottom line: LinkedIn’s rapid growth in China has been aided by its low-key approach to the sensitive market, and a high degree of autonomy for its local unit from its distant US-based parent.
LinkedIn reaches 20 mln China users
US business networking giant LinkedIn (NYSE: LNKD) is quietly emerging as one of the few foreign success stories in China’s social networking (SNS) landscape, using a low-key approach that has helped it steer clear of controversy. I haven’t written much about the company since its slightly controversial entry to China 2 years ago, when it issued a statement acknowledging it would be subject to the country’s strict self-censorship rules.
LinkedIn’s ability to avoid controversy is probably due in large part to its low-key approach, and its choice of an industry veteran with experience in both the US and China to head its local operations. True to his low-key style, company chief Derek Shen is making some minor headlines today with comments at a Shanghai event, including his disclosure that LinkedIn has signed up more than 20 million local users during its first 2 years in China. Read Full Post…
Bottom line: Yum may sell control of its China unit to Chinese partners in a bid to become more local, while ZTE’s plans for a Nubia IPO reflect a growing emphasis on its younger, trendier smartphone brand.
China set to take control of local KFC?
A couple of big IPO stories are rippling through the headlines, led by word that an investor group headed by China’s sovereign wealth fund could buy control of the China unit of Yum Brands (NYSE: YUM), owner of the KFC fast-food chain, as it gets set for a spin-off and separate listing. This particular news marks a shift from previous reports that implied Yum would retain control of its China unit, even as it sold a major stake to big institutional investors.
While the Yum listing is likely to come later this year, another smaller but interesting deal has telecoms giant ZTE (HKEx: 763; Shenzhen: 00063) saying it plans to spin off and separately list its smartphone division that manufactures under the Nubia brand in the next 3 years. That hints that ZTE may be re-thinking its smartphone business, and perhaps preparing to slowly de-emphasize its older ZTE-branded phones in favor of its younger, higher-end Nubia line. Read Full Post…
Bottom line: McDonald’s plan to sell its wholly owned China stores to China Resources looks like a smart move that should help it achieve its aggressive new expansion plans in the market and broadly benefit both sides.
McDonald’s, China Resources eye tie-up
Leading consumer conglomerate China Resources looks like a company with an identity crisis these days, with word that it’s bidding to buy the China store operations of global fast food giant McDonald’s (NYSE: MCD). Such a deal would be huge, since China is now home to more than 2,200 McDonald’s, and the US company recently announced plans to open another 1,000 restaurants in the market over the next 5 years.
It’s important to note that many of McDonald’s existing China restaurants are run by local franchising partners, and that a potential sale of its China stores to China Resources wouldn’t affect those outlets. McDonald’s uses a similar franchising model throughout most of the rest of the world. It originally owned and operated most of its China restaurants when it entered the country in the 1990s due to the newness of the market and lack of suitable partners. But it has said recently that it wants to move to a franchising model there as well. Read Full Post…
Bottom line: Yum’s China unit is getting a relatively low value due to the country’s unique risks and slowing economy, while YTO’s backdoor listing is likely to get a cool reception due to intense competition in China’s parcel delivery sector.
Yum seeks investors for China unit
Two major IPOs are in the headlines today, one from the more mature fast-food business and the other from the fast-growing but extremely competitive package delivery sector. The first deal has Yum Brands (NYSE: YUM) in talks to sell up to 20 percent of its China division to private equity investors, as it tries to value the unit in the run-up to a highly anticipated IPO. The second has Alibaba-backed (NYSE: BABA) parcel delivery service YTO Express launching a backdoor listing in Shanghai, as it looks for cash to support its operations that are probably losing big money.
Chinese IPOs have gotten off to a slow start this year, both in China and overseas, for a number of reasons. Beijing has banned new domestic offerings for now, in a bid to stabilize markets after a massive sell-off at the beginning of the year. New US listings have also been slow, as many start-ups that previously would have chosen New York now consider listing at home instead. Hong Kong has been the only area with significant new activity, though even there the volatility in China have also depressed the market. Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 4. To view a full article or story, click on the link next to the headline.
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Bottom line: McDonald’s could see a strong rebound in China over the next few years, as consumers give the chain a second look following an overhaul that includes the roll out of a high-tech burger customization program.
McDonald’s expands China high-tech burger program
Chinese consumers are welcoming a McDonald’s (NYSE: MCD) high-tech program for customized hamburgers, with word that the world’s largest burger chain will aggressively expand the concept in China this year. I have yet to visit one of the new stores in the program, but admit I’m intrigued by the concept that allows customers to personalize their burgers at computer kiosks inside stores before having them delivered to their tables.
That kind of curiosity and novelty factor could be key to jump-starting McDonald’s China business, which has stalled over the last few years as customers flock to a wide range of other alternatives more suited to local tastes. Both McDonald’s and crosstown rival KFC (NYSE: YUM), which is in the process of spinning off its China unit into a separate company, have suffered from slowdowns to their China operations in recent years for similar reasons. Read Full Post…
Bottom line: Yum’s plan to potentially list its China unit in Hong Kong, alongside a concurrent New York listing, looks like a smart move that would make the stock more accessible to Asian investors and give it a more local flavor.
Yum eyes HK listing for China unit
The struggling China unit of Yum Brands (NYSE: YUM), owner of the KFC and Pizza Hut chains, has just released a slew of new details on its prospects, including a long-awaited return to same-store sales growth after several years of declines. The announcement comes as Yum, under shareholder pressure, prepares to spin off its China operations into a separately listed company.
Apart from the new forecast for a return to same-store sales growth, one of the most interesting China-related details in the new announcement is the potential for a Hong Kong listing by Yum’s China unit as part of the spin-off. That move would make Yum China’s shares available to many mainland Chinese investors, and would also add a distinctly Asian flavor to a company that has now seen as a downscale purveyor of greasy western fast food. Read Full Post…
This week’s Street View gets us into the festive holiday mood with a look at food, including the latest take-out dining craze sweeping our city and a much smaller but still significant development in the main campus cafeteria at the university where I teach.
The bigger trend has seen a sudden explosion of take-out dining services in our city, resulting in a new flood of bicycles and other deliver vehicles zipping through the streets of Shanghai. The smaller item saw the main dining hall at Fudan University officially launch a western-style restaurant over the past week, bringing tasty but greasy items like pizza, pasta, steaks and upscale coffee to some of our city’s best and brightest young minds.
One of my favorite things about writing this column is getting to chronicle the many booms and subsequent busts that continually sweep through a major city like Shanghai. I’ve previously written about local explosions in convenience stores, beauty salons, coffee shops and most recently asset management companies, as entrepreneurs and big chains flocked to these latest business trends. Read Full Post…
Bottom line: Alipay’s move into Hong Kong through a tie-up with Marriott marks the start of a major global expansion for the online payment service, with Hong Kong the likely first stop due to its strong China ties.
Alipay in new Marriott tie-up
Homegrown Chinese electronic payments service Alipay is taking its growing rivalry with state-owned behemoth UnionPay to the global stage, with word of a major new move outside its home China market. That move will see Alipay follow a familiar route for many globally-minded Chinese companies, with a first stop in Hong Kong. It has Alipay forming a major new alliance in the former British colony with global hotel giant Marriott (NYSE: MAR), as the first stop on an overseas tour that could ultimately see the financial services affiliate of Alibaba (NYSE: BABA) challenge global names like Visa (NYSE: V) and MasterCard (NYSE: MA).
This latest move is part of a larger new tie-up between Marriott and Alipay, which is part of the Alibaba-affiliated but separately owned Ant Financial. The tie-up is mostly limited to mainland China initially, but significantly includes Hong Kong-based hotels. It also marks one of the biggest moves to date into Hong Kong by Alipay, which is better known as an electronic payments service used for smaller items usually costing $20 or less using shoppers’ online accounts and smartphones. Read Full Post…
Bottom line: Yum’s new leadership change marks the start of a new period of sustained same-store sales growth for KFC in China, which could include a spin-off of the company’s China business over the next 2 years.
Yum names new China head
Market wisdom often says that China is too big to ignore for most multinationals, despite the market’s complexities and many restrictions. Now a new trend is emerging that says China is too big and complex to be run as part of a company’s bigger global operations, and needs to be split off into a separate unit for major global firms.
That’s the interpretation some are making following Yum Brands’ (NYSE: YUM) naming of a new China chief, and growing speculation that the parent of the KFC and Pizza Hut chains will spin off its China business into a separate company. In this case, Yum’s naming of Micky Pant as CEO of Yum Brands China comes as KFC is in the midst of a major overhaul for its largest market outside the US. Read Full Post…
